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Sales of Xiaomi’s new Mi 5 popped in China this week, ahead of Apple ’s ( AAPL ) expected launch of the less pricey, 4-inch-screen iPhone SE in the spring. Shares in Qualcomm ( QCOM ), whose Snapdragon 820 processor is built into the Mi 5, lifted more than 1% in the stock market today . Apple stock was down about 0.5% in afternoon trading. Xiaomi said that it had nearly 17 million registrations in hand for the Mi 5 on March 1, the first day of sale in China, though only one-fourth as many devices were reportedly ready for shipment. Xiaomi was the top smartphone seller in China in Q4, with 15% market share, followed closely by Huawei, with Apple in third place. Even though Apple’s December-quarter revenue growth slowed year-over-year, overall iPhone demand was one reason why Xiaomi missed its 2015 smartphone shipment target, says research firm IHS. While Apple is apparently going small in China and emerging markets, the flagship Mi 5 has a 5.15-in. display that may help Xiaomi promote a new multiperson video chat feature vs. Apple’s FaceTime. At the Mobile World Congress in Barcelona in February, Xiaomi said that it would license U.S.-based Vidyo’s conferencing technology for an app pre-installed on the Mi 5. The app is also available free on iOS and Android devices. “Scale is crucial for all communications apps, and Xiaomi’s plans to launch the app on Google Play and iOS illustrate this,” said Jack Kent, an IHS analyst, in an email. “Mi Video” supports multipoint videoconferencing, while users of Apple’s FaceTime can video chat with only one other person. While the Mi Video app may give Xiaomi a boost, “there could still be concerns about how much data video calling consumes — users on limited mobile data plans or pay as you go services may not be keen to use such services,” added Kent. At Forrester Research, analysts say that Xiaomi may have challenges. “China’s mobile connectivity has been slow, and videoconferencing can be taxing on a network,” Forrester analysts said in a blog post on the video app. However, analysts agree that Xiaomi aims to set itself apart with more features aside from pricing its hardware aggressively, especially if it plans to expand globally. “Xiaomi needs to do more with its software ecosystem to significantly grow its business beyond its home market of China,” says an IHS report. That’s where Xiaomi’s partnership with Qualcomm could help. The new Mi 5 is priced at roughly $300 and $350 with 32 GB or 64 GB of data storage. Xiaomi still garners more than 90% of its sales in China, though demand is growing in India and Indonesia. Xiaomi still doesn’t sell mobile phones in Europe or the U.S. China’s slowing economy is a worry for its local smartphone makers as well as Apple. Apple’s December-quarter sales in China rose only 14% from the year-earlier quarter, down from 99% growth the preceding quarter. The iPhone SE will sell for $400 to $500, said one report. Samsung, meanwhile, was pushed out of the top five smartphone sellers in the December quarter, says Strategy Analytics. Scalper1 News
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